Medtronic, Inc. v. Intermedics, Inc.

162 F.R.D. 133 | D. Minnesota | 1995

ORDER

NOEL, United States Magistrate Judge.

THIS MATTER came before the undersigned Magistrate Judge on the 30th of January, 1995 for a hearing on plaintiffs motion to compel testimony and production of documents regarding defendant Intermedies’ interpretation and understanding of a 1988 settlement agreement.

I. The Parties’ Positions

Plaintiff Medtronic (“Medtronic”) asserts that defendant Intermedies (“Intermedies”) has, through its pleadings, put its interpretation and understanding of a 1988 Settlement Agreement (“Agreement”) between the parties at issue. However, Intermedies has refused to allow discovery into Intermedies’ intent and understanding of the Agreement; it asserts either attorney-client or work product privilege. Peter Dorflinger, general counsel for Intermedies, was identified as the person with 30(b)(6) knowledge of this Agreement. Dorflinger has asserted privilege even for fact questions about the Agreement. Also, Intermedies is claiming privilege as to all internal communications related to the Agreement, and has refused to produce some documents relevant to the Agreement on the grounds of privilege.

Medtronic argues Intermedies should be compelled to produce factual information, internal discussions not involving an attorney, and a 30(b)(6) witness capable of testifying about Intermedies’ interpretation of the Agreement. In the alternative, Intermedies should be precluded from asserting the attorney-client privilege for 30(b)(6) testimony about Intermedies’ interpretation or understanding of the Agreement.

Intermedies responds that Medtronic is trying to rely on testimony of Intermedies’ attorneys to avoid the clear language of the Agreement. The materials sought by Med-tronic form no element of any claim or defense. Intermedies has not injected its own extrinsic interpretation or understanding of the Agreement into the case. Instead, the document speaks for itself. Because In-termedies’ interpretation and understanding is within the four corners of the Agreement, no extrinsic evidence, particularly privileged information, need be produced.

II. The Court’s Analysis

There is no settled rule finding implied waiver of attorney-client privilege. Common factors to finding implied waiver are (1) assertion of the privilege is a result of an affirmative act; (2) through the affirmative act, the asserting party has placed the protected information at issue by making it relevant; and (3) application of privilege would deny the opposing party access to information vital to its defense. Hearn v. Rhay, 68 F.R.D. 574 (E.D.Wash.1975). In an Eighth Circuit opinion, the court looked to two elements to determine if waiver of attorney-client privilege could be implied: (1) implied intention and (2) fairness and consistency. Sedco Int’l, S.A v. Cory, 683 F.2d 1201 (8th Cir.1982), cert. denied, 459 U.S. 1017, 103 S.Ct. 379, 74 L.Ed.2d 512 (1982).

All parties in this case agree that the only persons 'with extrinsic knowledge or evidence of the interpretation of the Agreement are lawyers. Dorflinger, Intermedies’ 30(b)(6) witness, is general counsel for Intermedies.

The court is persuaded, based on Intermedies’ representation that the document speaks for itself, that extrinsic evidence of Intermedies’ understanding or interpretation of the agreement is irrelevant. Intermedies’ interpretation of the agreement, based on the four corners of the document, will be determined to be either correct or incorrect.¹ Intermedies argues that its interpretation is based solely on the four corners of the document and requires no outside evidence. As long as that remains true, no extrinsic evidence is needed and Intermedies has waived no privilege.

To the extent Intermedies intends to offer extrinsic evidence to bolster its interpretation of the document, it has waived the privilege attached to Intermedies’ interpretation of the document. Once Intermedies offers any extrinsic evidence, it has affirmatively moved outside the four corners of the document to provide an understanding and interpretation of the Agreement. Extrinsic evidence is any evidence beyond the four corners of the Agreement, including testimony or documents, relevant to Intermedies’ understanding or interpretation of the Agreement.

Intermedies is asserting the privilege merely as a shield when it does not plan to offer extrinsic evidence of its own. However, if it offers its own evidence of the Agreement, then the privilege is asserted as a sword and a shield. See Bieter Co. v. Blom-quist, 156 F.R.D. 173, 179 (D.Minn.1994) (applying Sedeo, finding waiver where assertion would allow privilege to be used as both shield and sword). Intermedies would be able to protect documents it does not want disclosed by raising the attorney-client privilege, and offer documents in support of its case by brandishing privileged documents of its choice. In this case, fairness requires that Intermedies choose a single course of action — either complete waiver or complete protection.

Within ten days of this Order, Intermedies must notify Medtronic whether it intends to rely on extrinsic evidence to support its interpretation of the Agreement. If Intermed-ies so intends, then the privilege has been waived and Intermedies must produce the documents requested by Medtronic in its motion to compel.

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that:

1. Defendant Medtronic’s motion to compel testimony and production of documents [# 65] is DENIED WITHOUT PREJUDICE. Plaintiff Intermedies has ten (10) days from the date of this Order to notify defendant Medtronic whether it intends to use any extrinsic evidence in support of its interpretation of the Agreement. If In-termedies so intends, then the privilege is waived and defendant Medtronic’s motion is granted.

1 . As such, this case is distinguishable from Pit-ney-Bowes, Inc. v. Mestre, 86 F.R.D. 444 (S.D.Fla.1980). In Pitney-Bowes, the intent of the parties was at issue. Here, Intermedies is not relying on the advice and interpretation of its counsel as its defense. If the Agreement does not support Intermedies’ position, Intermedies will suffer the natural consequences.